The use of magnetic debit cards is gaining widespread acceptance as a perfect system for automated point of sale control, as well as photo identification, master accounting, and access control functions. For example the Versacard TM system marketed by Digital Access Control of Manassas Park, Va. provides for the utilization of plastic cards with magnetic media on a face thereof in debit card readers which control photocopiers of all kinds, printers and other computer operated devices, facsimile machines, microfiche equipment, or any other business machines, laundry machines, vending machines and service dispensers, parking gates, and any other conventionally coin operated devices, as well as being usable in identification readers for access control, and identification (e.g. photo ID purposes).
While debit card systems, and associated readers, have enormous advantages compared to coin controlled and like equipment, there are some systems and card readers that are on the market which have an enormous potential for fraudulent utilization. Typically during utilization of the debit card system, a debit card with magnetic media on one face thereof is inserted into a debit card reader so that the magnetic media is inserted with proper orientation into a debit card reader so that the magnetic media thereon is read with a magnetic read/write head. In some systems on the market today, after the card is read and the information about the amount of "money" or "credit" remaining on the card is transmitted to a memory of a CPU, the transactions are allowed, and at the end of the transactions a new amount of "money" or "credit" remaining on the card is rewritten on the card with the magnetic read/write head.
This system is open to gross abuse. For example if one takes a debit card with $99.00 "money" on it, and attaches tape or other withdrawal media to one end of it, and then inserts it into a debit card reader with a like debit card--only with only a few cents remaining--on top of it, waits until the magnetic read/write head has read the amount of money remaining on the card and fed that to the CPU so that the computer assumes control over the transaction, and then quickly jerks out the lower card (the upper card remaining), at the end of the transaction the remaining card will be rewritten with whatever amount remains after the transaction is completed utilizing the amount of money that was originally on the first, lower card. For example if the lower card had $99.00 left, the upper card one cent, and the transaction uses one dollar, $98.00 will be written onto the card that previously had only one cent left, causing a loss to the business utilizing the system of $97.99. This same fraud can be practiced by inserting a valuable card, and then--after reading--inserting a worthless card between the valuable card and the read/write head.
According to the present invention, the fraudulent manipulation of debit card readers as described above, utilizing a worthless and a valuable debit card pair by changing the worthless card for the valuable card, is avoided in a number of alternative or complimentary manners.
According to a first aspect of the present invention, a method of preventing fraud in the utilization in a transaction of debit cards having magnetic media on a face thereof and debit card readers having a magnetic read/write head is provided. The method comprises the steps of automatically: (a) With the magnetic head, reading a card inserted into a debit card reader to determine information from the magnetic media thereon. (b) Generally simultaneously with step (a), writing a security code on the magnetic media with the magnetic head. (c) Prior to completing a transaction with the card, reading the magnetic media to be sure that the security code is present. And, (d) insuring that the card cannot be used for further transactions if in response to step (c) it is determined that the security code is not present (e.g. by invalidating the card in the reader with the read/write head, or if the card was invalidated immediately after step (a), precluding revaluation of the card).
As used in the present specification and claims, "invalidating" means to render the card incapable of being properly utilized in a magnetic read, either by placing magnetic indicia on the card that precludes normal transactions from taking place, or by erasing or disarranging data in the magnetic strips.
According to another aspect of the present invention, a different method is provided for preventing fraud, which may be utilized alone, or preferably in conjunction with the method as described above. According to the second aspect of the present invention the debit card reader has a gate at an entrance to the reader, and the method comprises the steps of automatically: (a) With the magnetic head, reading a card inserted into a debit card reader to determine information from the magnetic media thereon. (b) Generally simultaneously with step (a), closing the gate to positively prevent movement of the card out of the entrance to the reader until the transaction is completed. And, (c) after completion of a transaction, opening the gate to provide for removal of the card from the reader, or if it is determined that the card is illegal, the card can be trapped in the reader.
According to another aspect of the present invention, an alternative or complimentary method of preventing fraud is provided utilizing a debit card reader having a plurality of card position sensors. According to this alternative or complimentary method of the invention, the following steps are practiced automatically: (a) With the magnetic head, reading a card inserted into a debit card reader to determine information from the magnetic media thereon. (b) Generally simultaneously with step (a), after the card has come to rest in a transaction position, enabling at least one of the sensors to sense the movement of the card from its rest position. And, (c) if in response to step (b) it is determined that the card has moved more than a predetermined amount from its rest position prior to completion of a transaction, invalidating the card in the reader with the read/write head, or precluding revaluation if the card was invalidated immediately after step (a).
In general, according to the invention there may be provided a method of preventing fraud in the utilization in a transaction with magnetic debit cards having magnetic media on a face thereof and debit card readers having a magnetic read/write head, by practicing the steps of automatically: (a) With the magnetic head, reading a card inserted into a debit card reader to determine information from the magnetic media thereon. (b) Invalidating the card with the read/write head. (c) Prior to completing a transaction with the card, checking card parameters or position to determine whether or not the card present is the same card read in step (a). (d) If in response to step (c) it is determined that the original card is not present, insuring that the card cannot be used for further transactions by not revalidating the card; and (e) if it is determined during step (c) that the card is the card originally read in (a), revalidating the card with the proper enabled amount on it.
The invention also contemplates apparatus for implementation of each of the methods described above.
The invention is particularly advantageous and desirable since it can be practiced merely by changing software controls for equipment pre-existing in conventional debit card readers. In some circumstances, however, where a gate is not present, or where a gate at the entrance has insufficient structural integrity, a gate, or a more substantial gate, controlled by a gate motor, is provided at the entrance to the debit card reader. However because the invention primarily relates to a method of control of already existing parts, it is extremely easy to retrofit onto existing units.
In practicing the method according to the invention, if it is determined that the security code is not present, and/or that a card has moved more than a predetermined amount from its rest position prior to completion of a transaction, in addition to invalidating the card, a "fraud" message can be displayed on the LCD associated with the reader. Also, in order to provide data to assist in the capture of those attempting fraudulent use of the system, date, location, and like information can be magnetically encoded onto the card so that if the card is ever presented for redemption the true circumstances of the fraudulent use can be identified.
It is the primary object of the present invention to prevent fraud in the utilization in a transaction of debit cards having magnetic media on a face thereof in debit card readers. This and other objects of the invention will become clear from an inspection of the detailed description of the invention, and from the appended claims.